Jul 11, 2006

Privatization of the land: will it lead to land security?

Land tenure is argued has a link with land security. It is why many believe that private land tenure provides more security than customary land tenure. This brief argues that private land tenure is not necessary applied in every situation; customary land tenure has an equal importance as individual land tenure. Securing individual land tenure might not be achieved through getting a land certificate; many conditions influence the land security.

In the context of Indonesia, the issue of land security is important despite the fact that the country is land and natural resources’ abundant. The access to the land is associated with security of access in terms of ability to get livelihood on the land as well as providing food security. In addition the land as a capital plays a role to access the credit in the financial market. Therefore the lack of security of property right over the land is an indication the difficulties encountered by poverty reduction program. Realizing the importance of the issue as reported also by World Bank (2005) that only 17 million parcels of land have been registered out of 80 million parcels(a), the government has committed to provide land certificate for 200 thousand of poor people in the year of 2007(b).

Before moving toward assessing land policy in Indonesia, some problems have been identified covering cross-cutting issues including intersection between the land and natural resources issues:

Acknowledgement of property right over land at different level

According to the constitution, all water, land and natural resources beneath the earth belong to the state and serviced to the welfare of the society (Constitution 1945, article 33). The idea was very good but it is not always the case since the government was so powerful. By basing from this law the government has legitimacy to acquire the land for development use like set up transmigration area, allocate forest for concession and so on. One of the striking facts, Brown (1999) calculated 585 timber concessions covering 62 million hectares of forest by the end of 1995 (c). This was an indication of the prevailing role of the government by which it didn’t always recognize the indigenous right based on customary relationship.

On the other hand, the Basic Agrarian Law (BAL) no 5/1960 attempted to accommodate customary land right but still the state sovereignty has to be preceded over the customary rights (d). These basic laws have been inspiring the latter laws like forestry law no. 41/1999 recognized the indigenous community and customary land right though it is not fully; there is a condition of the existence of the community practicing their customs. The debate between community right and the statutory law has never ended; at least the parliament passed a decree (Tap MPR) IX/2001 in order to reorganize the agrarian reform and natural resources management. Still it has little implication on the recognition of customary tenure.

The escalation of conflicts involving local community, private companies and the government

This complexity of law enforcement finally led to some conflicts between the government and the local indigenous people. National Spatial Coordination Board-BKTRN (2004:5-6) found the conflicts are mainly the occupation by the community in the land that claimed as customary land be it estate, forest, or mining areas (e). This also includes the overlapping allocation of forest land but it has already converted into non-forest or no forest standing anymore. Currently the conflict moves from the community versus the private sector toward the community versus the local government in the context of decentralization. Furthermore the conflicts are also happening within the groups of the society as the World Bank (2004:5) indicates that many conflicts related to the land ownership are associated with food security (f).

New decentralization policy

The decentralization policy was established in 1999 and intended to distribute the power over central government to district government. However, some of the authorities were still kept by central government including land policy formulation; it is still under central government authority. Some laws and regulations are conflicting started with government regulation 25/2000; land policy is under the central government authority then it is given to district/municipal government to manage land use in district level including settle the land dispute involving customary land by President Decree 34/2003. Having so many regulations, the latest President Regulation 10/2006; it returns the land policy and management authorities to the National Land Board (BPN) which is still centralized institution in nature (g).

The factors affecting land security

The overlapping authority is leading to ignore the central issue of dispute between the government and the local community. For some communities, the land are controlled under communal management by which it rooted on traditional claims, unwritten law and passed through generation based on genealogy and territorial relationship. This type of land tenure is prevalent over the country especially in the eastern part of Indonesia. Even within the country there is no single system except what has been programmed by the government namely land registration and administration through certification. As it has been mentioned before about 63 million parcels of the land have not been registered yet; the government conducted the land registration and certification program for the purpose of giving legal security as it is the only means recognized by the law (BAL) (h).

Despite the certification program would lead to secure ownership, up to now the programs are predominantly imposed by the government. Such enforcement is important but it undermines the fact that the owners are able to motivate themselves to register their property. This voluntary registration doesn’t happen since land certification is neither cheap nor uncomplicated especially for poor people.

The other reason for not applying land certificate is the status of the land is under customary land. The land often indivisible since it is controlled by the lineage family; they are reluctant to divide for the whole community as the existing of some forms of power relation and inequality. Besides division of the land is rather difficult as a result everyone will get small parcel of land. In this sense, the use of the land for agriculture purposes becomes worthless and only creating inefficiency. As soon as the people get the land certificated; the land becomes uncontrollable. By means of a certificate, the land can be easily commercialized or using it as collateral having the loan in the bank. As a result the land can be concentrated and only affordable for the rich. A worried regarding to the losing of the land as manifestation of the relationship to the ancestors; customary land would be disappeared. This kind of feeling was experienced by local community in rural West Sumatra given the fact that the land administration project (LAP) was on a trial certifying the customary land (i).

It is often argued that clear land ownership as well as proven by land certificate as indications of secure land tenure. In fact, the certification process is meant to make land market works, improving efficiency in terms of resource allocation and to be able to improve economic growth but not for the welfare of the peasant (j). Market is not always working in the case of the information like price, location, number of buyers and so on might not be distributed evenly. The buyer would get different information from what the owners have therefore certificated land is not always marketed at its market value, sometimes less or even more.

Considering the process of certification might take time as well as has financial implication, the promise that it is free might not be the case in the field (k). There is an administration cost regarding to record the title, infrastructures, and human resources. It has not yet considered when the collusion and corruption occur at various level of the process. Finally, the costumers need to pay the fee for this kind of bureaucratic inefficiency.

Institutional arrangement has further implication for giving secure property. The fact that rules and regulation are often overlapping leading to more insecurity. It has a contribution to uncertainty situation. The authority of the government to appropriate the land for the public use is one of the latest regulations (President Regulation 36/2005). Although the purpose is good in terms of delivering public services, it opens to abuse. The compensation scheme embedded in this law however should be critically looked at. Having paid for the compensation, it doesn’t mean that the government can take over any land but it has to be based on particular spatial plan. In fact, spatial plan is exist in the paper but the reality might not say so; the application is still questionable. The payment for the compensation might not always at a market value of the land implying the government often gets the land at a lowest cost. Furthermore, the distribution of the compensation often leads to a conflict related to how much is the compensation and its disbursement might not at once leading more insecurity for the people.

Having no paper proof is a big problem but having it also doesn’t always solve the problem of land insecurity. In many cases the same plot of the land has more than one certificate by which one source of the conflict between certificate’s holders. One holder can have no security until 5 years after land registration, by the law, it is prohibited to assign new certificate afterward. Since not every land belongs to private property right, in the case of customary land when the selling is not informed to the other lineage family, other family might reclaim the land or even worst they can get the same certificate. To resolve the court might argue that new certificate can be given as long as equipped with new evidences (l).

Policy implication

The policy need to be taken is to facilitate the recognition of customary land. The fact that it is very prevalent in Indonesian society, the government needs to accommodate such system in the national legal system. Up to now the system has not pointed specifically on legal aspect of customary land. However to make it a written law might not suitable with the nature of customary law that is flexibility and adaptability. Still, the government needs to consider the existence of the system.

Voluntary land registration might be one solution in the case of customary land relation is still strong. Some of community has not used their customary law therefore for they can become a subject for the government’s land registration program. But for those who don’t want to transfer from the communal right to the individual ownership, the government can’t enforce the community to surrender their land. In that case, the community has to be consulted if the land would be used for public use.

The government has to provide a better compensation scheme to allow the people maintain their livelihood having no land. The government needs to improve the governance on land administration system. It comprises the process and mechanism of land registration; provide appropriate compensation for acquiring the land for public use. It has also deal with the problem of speculation in the case of the land for public use since the negotiation process opens to abuse and rent seeking activities.

Finally this brief argues that the privatization and giving land ownership to individual might not be applied in a single system. The existence of other system of land ownership should not limit the opportunity of such the communities to get equal public services. Thereby the government needs to consider the system as part of the richness of the culture and dealing with them properly would benefit not only the government but also the people.

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